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Why Is Buckeye (BPL) Down 12.3% Since Its Last Earnings Report?

It has been about a month since the last earnings report for Buckeye Partners L.P.BPL . Shares have lost about 12.3% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is BPL due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Buckeye Partners Q3 Earnings Miss, Revenues Beat

Buckeye Partners, L.P. reported third-quarter 2017 earnings of 81 cents per unit, lagging the Zacks Consensus Estimate of 86 cents by 5.8%. Moreover, it was lower than the year-ago figure of $1.19 by 31.9%.

Third-quarter earnings were impacted by lower capacity utilization during the quarter, due to the exit of a long-term customer from one of the facilities. Additionally, the company's facilities and operations in the Bahamas, Puerto Rico, Florida and Corpus Christi were affected by hurricanes.

Total Revenue

In the quarter under review, Buckeye Partners' total revenue came in at $922.6 million, beating the Zacks Consensus Estimate of $828 million by 11.4%.

Total revenues were up 20.3% year over year owing to better performance of Merchant Services segment in third-quarter 2017.

Operational Highlights

In the third quarter, the partnership's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations increased 2.1% year over year to $277.3 million.

Total costs and expenses were $754.7 million, up 34.7%. The partnership's operating income was down 18.5% to nearly $168 million from $206.2 million a year ago.

Interest and debt expenses increased 16.7% to $56.6 million.

Financial Screening

As of Sep 30, 2017, Buckeye Partners had cash and cash equivalents of $7.9 million compared with $640.3 million as of Dec 31, 2016.

Long-term debt as of Sep 30, 2017 was $4,593.6 million, higher than $4,217.7 million as of Dec 31, 2016.

Total capital expenditure in third-quarter 2017 was $100.7 million, down 12.5% from nearly $156 million a year ago.

Cash Distribution Update

The partnership announced fourth-quarter 2017 cash distribution of $1.2625 per limited partner unit, up 3.1% from the prior-year payout of $1.2250 per limited partner unit. The revised distribution will be paid on Nov 20, 2017, to unit holders of record as of Nov 13.

How Have Estimates Been Moving Since Then?

Fresh estimate followed a flat path over the past two months.

Buckeye Partners L.P. Price and Consensus

Buckeye Partners L.P. Price and Consensus | Buckeye Partners L.P. Quote

VGM Scores

At this time, BPL has a nice Growth Score of B, though it is lagging a lot on the momentum front with a D. The stock was also allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is suitable for value and growth investors.

Outlook

BPL has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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